OBOSS indicates that the market is entering over bought territory. This is a good time to be alert for weakness in the market, but give your winners room to run. If the market moves very sharply to the upside, considering taking some profits.

SPY 119 held as support today which is very bullish. There is still a lot of headline risk in the market, but overall we are seeing the start of an up trend.

OBOSS closed the week out in extreme over sold territory. This has been a very difficult week for equity markets and we are seeing the best buying opportunities in two years. While there is a high risk of the markets continuing lower OBOSS indicates that we should be buyers for an impending bounce. If you look at price as a rubber band, the band is stretched to the breaking point in one direction and will most likely snap back to more neutral levels. There is always a chance the rubber band breaks and the markets free fall into the abyss. The way I see it – if the world isn’t ending, we have a great buying opportunity on our hands. If the world is ending, we have more important things to worry about then the price of stocks. If you’re buying, scale in slowly and build a position for the bounce. If you are following the TNA trade from last week, we started building a position in anticipation of the bounce trade.

We are in a confirmed down trend and using OBOSS to time a bounce trade. Margin should never be used to trade against the trend. Trades against the trend are higher risk then trend trades so caution is advised.

OBOSS closed at -2.55 which is considered extremely over sold. This reading correlates to some of the worst days during the 2008-2009 bear market. We were watching for buying opportunities on TNA between 55-59 today and that range was taken out. This is why you want to scale in slow if you get an early start (before OBOSS is less then -2.0). Now that we have a confirmed extreme over sold call on the market, TNA is a buy at this level (54) and lower. The target snap back rally / relief rally is 72-77. This is also near the area where TNA initially broke down earlier in the week. Whenever OBOSS gets this extreme, a relief rally is in the very near future. Since the market is in a down trend it is prudent to take profits as they develop.

OBOSS closed the day out at -1.49 which is hovering around over sold to neutral territory. If you were reading the blog yesterday we talked about price ranges to enter TNA for a bounce trade. If you were able to get some TNA, great! If you sold some for a profit, even better! Now that we’ve had a small bounce the dilemma is whether the market will continue to bounce or fall back into over sold territory. In cases like this, it is a good idea to take a little profit off the table and let the rest run for bigger profits.
Let’s see if SPY can hold support and build momentum for a serious relief rally.

OBOSS closed in neutral territory again today which indicates the odds favor further declines as the trend continues. We are watching SPY to see where support will develop. It looks like a test of the 200 day moving average on SPY is possible.

Today TNA hit our target price of 75 a share where we will review OBOSS and see if it is good time to consider going long the ETF. OBOSS indicated today that TNA is currently trading at fair value so we would not want to get involved at this level thinking TNA is due to bounce. It very well may bounce from this level due to some news out of Washington, but we don’t have any indication from OBOSS that TNA is close to being over sold. The current model shows TNA in over sold territory at 65 and at extreme levels at 60 (this will change as the market changes). The reason TNA did not enter over sold territory today (with the 8 point drop) is due to the following reasons;

#1 Today’s selling came in strong enough to keep OBOSS neutral (healthy) which indicates that the current trend is intact and should continue.

#2 A lot has happened in the market since 7/18/2011 (mini rallies and dips) which impact OBOSS’s results. OBOSS indications are moving targets and need to be reviewed daily to have the best forecasting success.

Overall we use OBOSS as a tool to help us enter and exit the market at extreme readings. I like to trade with the trend which increases the odds that the trade will be successful. The best case trades come in when OBOSS is in extreme territory opposing the current trend.

Bullish example: OBOSS indicates the market is extremely over sold -2.5 and the current trend (as measured by the 50 day moving average) is heading up (best if price is trading above or at the 50 day at the time of the reading).

Bearish example: OBOSS indicates the market is extremely over bought +2.5 and the current trend is heading down.

We are likely to see OBOSS reach extreme over sold territory in the near future (there will most likely be some bounces before that happens). It might end up being a good setup for a quick swing trade on TNA (similar to mid June), but caution is advised because the market is in a down trend and the longer term up trends (200 day MA) is starting to fade. Bounces are not to be trusted until the market proves it can hold support and moving averages align to the upside again.

I hope this information helps improve your investing.

NOTE:

This is a hypothetical example of how professional traders could use this indicator and not a suggestion for anyone to invest in any ETF, stock, or speculative trade. Trading is very risky and no matter what any indicator suggests prices can decline until they reach zero!

OBOSS closed today almost exactly on the neutral line. Considering the market action this week a neutral reading might seems strange, but what this really tells us is the buying and selling are coming in at healthy levels and one side isn’t being over done. Some people might feel the market is over sold because it is down this week, but according the the propriety algorithm built into OBOSS we are neutral. Neutral readings don’t give us any edge in the market outside of expecting the current trend to continue. The trend is leaning down, but isn’t extreme so odds favor lower prices or sideways consolidation.

OBOSS closed the week out very close to over bought territory. Let your winning positions run. Keep an eye out for any extreme moves in the market to the upside which might push OBOSS into extreme levels. Next week should prove interesting as Washington works on the budget ceiling. Look for some volatility around news releases. Above all else… Protect profits!

OBOSS closed near zero (neutral) today while SPY was down almost 1%. SPY’s 50 day moving average is heading lower so any rally should be looked at with suspicion until it proves otherwise. Having OBOSS hovering at neutral and SPY heading lower indicates that selling is orderly and not causing an over sold condition. This type of market action could go on for a long time so be careful with any long positions until we have some indication that the up trend is resuming or we get extremely over sold.

OBOSS closed the week out in neutral territory. We are watching SPY to see what trend develops. Right now SPY is range bound with a mostly flat 50 day moving average. It is a good time to research new opportunities to implement once the trend is clearer.

OBOSS closed at .06 which is neutral. SPY’s 50 day moving average is getting starting to show signs of trending downward. Caution is advised as we’re not over sold and there isn’t a confirmed trend to follow.

OBOSS closed in neutral territory again today. The markets are holding up at support and buyers are showing interest in US equities. The trend is still mostly flat so we don’t have a whole lot to go on at this level. It appears most market participants are being cautious to moderately bullish. If you’re buying at this level of support, it is prudent to scale in slowly as you see buying opportunities.

OBOSS closed in the neutral zone and the market continues to consolidate. Today’s market action showed a lot of indecision amount the participants. We are focused on SPY support levels. The 50 day moving average is at 131.75 and the next support level is at 130.00. If these levels fail, I would look for OBOSS to get extremely over sold again for the next best entry point for longs.

OBOSS closed in neutral territory and SPY touched the 50 day moving average. The up trend is questionable as the 50 day moving average is flat. If support holds at the 50 MA, we have a buying opportunity to work with (as we anticipated last week). In this case, I would look to join buyers as price launches higher off support and avoid buying in hope that buyers will gain control. The stock market experienced some extreme moves lately. The saying is “volatility comes at turning points”. Let’s see if support holds.

OBOSS closed the week at 1.27 which is more or less neutral. The market consolidated today which brought us back from the edge of being over bought in the short term. A test of the 50 day moving average would be healthy, but buyers are being very aggressive and taking advantage of any weakness. The only negative from today’s market action was a potential one day island reversal. I think this is something to keep in mind when buying weakness. Scaling in slowly and managing risk are prudent considering the extreme moves of the last month.

OBOSS closed at 1.66 which is edging into over bought territory. There is plenty of room before we get to extreme levels, but this rally has been impressive because it went straight from extremely over sold to over bought without a pause. If SPY hits 137 without pulling back or increasing volume, we will be in extremely over bought territory. The moving averages are coming around and it looks like the market is confirming the longer term up trend. Caution is advised as we are into the over bought zone – protect your profits and look to buy weakness once this move it over.

OBOSS closed at 1.28 and the market is consolidating the relief rally by holding current levels. It would be healthy for the market to pull back and test the 50 day moving averages. If we move higher without a pull back or increasing volume, SPY will enter over bought territory at 135 and extreme levels at 137 Keeping that in mind… protect profits and look for buying opportunities as the market consolidates the last rally.

OBOSS closed at 1.04 which is still a neutral indication. Normally we look for the previous trend to resume whenever OBOSS is neutral, but since we don’t have a short term trend confirmation from the 50 day moving average on SPY – caution is advised. Protecting profits from the recent rally is top priority right now. We are watching SPY to see if support will develop around the 50MA. If we do find support at the 50MA, this should be considered a buying opportunity as the up trend is most likely resuming. This is a good time to review your shopping list of good quality stocks.

OBOSS closed last week at .64 SPY is trading above the 50 day moving average and the 50MA is flat. Protecting profits from the recent rally is top priority right now. We are watching SPY to see if support will develop around the 50MA. If we do find support at the 50MA, this should be considered a buying opportunity as the up trend is most likely resuming. This is a good time to review your shopping list of good quality stocks.

OBOSS closed at -1.12 which still leaves some room to the up side before we get back to neutral. Since we are no longer in a confirmed up trend, caution is advised once the market reaches equilibrium. We will review the trend once OBOSS is neutral. I suspect SPY will be trading near it’s 50 day moving average when OBOSS reaches zero.

OBOSS closed at -.90 which is still slightly over sold, but today’s rally did a lot towards bringing the S&P 500 back to equilibrium. We still have some room to the upside before we’re back to neutral.

SPY is trading in an area where the sellers have previously defended their positions. This is the 5th time SPY has tested the 130 zone (see below). The more times a level is tested the more likely it will break (at least that’s the theory).

What might happen… the sellers jump on SPY’s 130 level again hoping to bring the market down, but I suspect they will be overcome by buyers who have not had a chance to participate in the relief rally. Below is a chart with a potential of what might happen (look at the green line showing the market moving initially lower and then breaking out to the upside). Of course, this is all theoretical and we could just as well end up over sold again, but I think the odds favor some support this time around.

If this scenario plays out, it would be very bullish in the short term.

OBOSS closed at -2.22 and the market was ugly today. There are fundamental reasons why sellers over took buyers, but at the same time price action like today is pricing in Armageddon which is not likely. OBOSS is extremely over sold and we don’t have a lot of room before it hits the max level of -2.5. Today I pulled an old OBOSS chart out from early 2009 when the market was crashing and OBOSS wasn’t as extreme as it this week. That tells me that today’s selling is emotional. Unless the world is really coming to an end, this is most likely a buying opportunity. If you’re a buyer, scale in slowly in good quality stocks and don’t use margin.

Below you can compare today’s OBOSS readings to the readings we had in early 2009 right as the market turned around.

OBOSS closed at -2.44 which is an extreme over sold indication for the S&P 500. OBOSS has moved as low as -2.5 in the past so there is a potential for more downside, but at this time odds favor a relief rally in the very near future.

OBOSS closed at extreme over sold levels today. This indicates the market is over sold. Normally we see a rally within a few days of hitting extreme levels. We could still see some follow through to the downside taking us to -2.50, but within a short time we should see a relief rally.

If you’re buying this dip (with high quality stocks), keep in mind that this cycle up may just be a relief rally and we will have to see how strong it is in relation to the current trend before getting more aggressive to the up side. SPY’s 50 day MA is leaning down (slightly) – mostly it is flat. SPY is trading under the 50 MA so caution is advised and excessive risk taking should be avoided. Overall the market is in a large trading range and we are now near the lower end of that range.

OBOSS closed the week at .23 which is considered a neutral reading. Looking to SPY for trend guidance doesn’t give us much more to go on either as the 50 day moving average is pretty much flat lined. While the longer term up trend is still holding there isn’t much to celebrate because the recent bounces have not been strong enough to bring us higher highs and higher lows on the daily chart. Caution is advised while the market consolidates, but I would still consider buying very good value stocks that are trading at a discount. If SPY support fails on a closing basis around the 50 day moving average (132.50), it suggests the longer term trend may be changing over to a more negative view. Until that time we are still buying the dips, but we are using more caution and not buying anything considered volatile or risky.

If the trend does change to down, we will consider any rally a good place to raise cash for the next big buying opportunity when OBOSS signals -2.5

OBOSS closed at .84 which is still very neutral. The market bounced off support from earlier this week. Now we need to watch the market carefully to see if this rally will follow through and bring us new highs. Odds favor trades with the trend, but caution is advised as we’re not seeing the same level of momentum we experienced the last two pushes higher.

OBOSS closed the week out at .75 While the trend is up we should be buying the dips. OBOSS indicates the market is not over bought or over sold (neutral). Caution is advised as we have experienced a lot of choppy trading lately which usually indicates indecision for most market participants.

OBOSS closed the week out at 2.49 which indicates the market is over bought. OBOSS tagged 2.5 during the day on Friday, but closed just a hair off the max level. In the past when OBOSS hit this level we saw consolidation following the signal soon afterwords.

OBOSS closed today at the semi extreme level of 2.3 This indicates that the market is getting over bought. The market is in a strong up trend and we should protect profits by following portfolio sell rules. Usually when the market gets to this level we see pull backs which provide great buying opportunities to enter new positions and add to existing positions. We still have room to the upside, but caution is advised if we see a sudden move higher tomorrow without a lot of supporting volume. The best case scenario would be consolidation at this level letting OBOSS fall back under 2.0

2.0 is the level we’ve been waiting for and also indicates that the market is starting to get a little over bought. Our job now is to protect profits by following our portfolio sell rules. Depending on your strategy you can start taking some profits at price targets (scale out slowly) , sell calls on existing holdings to lock in profits and give you down side protection, or buy some cheap puts on stocks that are moving higher. In most cases it makes sense to let profits grow while OBOSS is initially getting over bought. When OBOSS indicates 2.3-2.5 it will be time to more aggressive with profit taking. The last time we hit this level it was a few weeks before we hit extreme levels. Normally, OBOSS will tag 2.0, pull back a little to 1.5-1.8 range and then rally higher into extremely over bought territory. There may be more buying opportunities (dips) for high quality stocks before we hit extreme levels.

OBOSS closed last night (4/25/11) at 1.47 which indicates that the longer term up trend is building momentum. We will need to keep an eye on OBOSS as it gets over 2.0. Hopefully you were able to add to good positions and find value stocks to purchase when the market was down. Now our job is to protect profits as the market moves higher.

OBOSS closed at 1.2 today which indicates the rally is still alive. We are now entering levels that gave us trouble before. Let’s see if the bulls can take the market to a new high.
Today the S&P 500 closed above the 50 day moving average which is bullish. The longer term trend line (200 MA) is still very bullish and the 50 day MA is neutral. Caution is still advised with riskier stocks. This is a good time to review your portfolio and rebalance for high quality growth stocks. As OBOSS climbs again to higher levels sell rules should be followed to protect profits as they are generated.

OBOSS closed the day at a healthy .19 We experienced a dip / buying opportunity on Monday, but in reality it was difficult to buy because Standard & Poor’s cut its ratings outlook to negative for US credit. Hopefully you were able to benefit from the lower stock prices.

With the last few weeks being “OBOSS neutral” we need to review the trend on the S&P 500.

The long term trend for the S&P 500 is currently neutral to up. The 50 day moving average is flat and the 200 day is moving up. It is mildly bullish while the price of the S&P 500 is below the 50 MA which is considered mildly bearish. The market is dead locked in a neutral market reading which doesn’t give us any advantage until we have higher or lower prices to push this level to bullish or bearish. This is common during healthy consolidations, but could also indicate a change in trend is coming.

If the market can move higher then the 50 day tomorrow and hold that level, we will have a more bullish scenario developing. Caution is advised for new stock purchases and higher risk positions should not be taken until we see some evidence the market can reclaim the longer term up trend.

OBOSS closed the week at .54 which is a healthy level for the market. Since the trend is still up we should expect the market to push higher until OBOSS gets close to 2.0 That gives us lots of room to the upside for making gains in stocks. We are looking for dips to add to good positions and this is also a good time to buy good quality stocks you find in GeoBargins and GeoSpecials.

OBOSS closed at .21 which is neutral, but the market rallied late in the day giving us some indication the up trend alive. We are watching the S&P 500 to see if it will rally above the 50 day moving average indicating the up trend is resuming. The moving averages on OBOSS are also pointing higher which points to higher prices in the near future.

OBOSS closed at .17 which is a neutral reading. This doesn’t give us a good indication of what the market will do next, but the odds favor the up trend resuming. Look to buy good quality stocks as they are discounted with the anticipation that the up trend will resume shortly.

OBOSS closed today at 1.39, but it tagged 1.51 twice in the last two trading sessions. This indicates to us that OBOSS is working towards the upper end of where we like to see this indicator. If SPY tags 135 in the next two days the S&P 500 will be pushing into over bought territory. With that in mind, use extra caution with margin and make sure you’re following your portfolio sell rules. We are still in a solid up trend and should be buying dips.

OBOSS closes a great week at 1.23. The market has been marching higher and OBOSS is still signaling healthy buying and selling. In other words, we are in an up trend and OBOSS does not indicate that we are over bought yet. It is a good time to buy good quality stocks when prices dip. Review your sell rules and make sure to take some profits as your stocks hit their targets.

The quarter closes out with OBOSS at healthy levels +(.98) This has been a great quarter to be in the market and I hope everyone made the best of it. We have a neutral reading on OBOSS with a strong up trend in place. We continue to buy good quality stocks while the trend is up.

OBOSS closed today at .14 which is a healthy / neutral indication for the markets. Providing the absence of any terrible head lines we should see the market build momentum for it’s next move higher and recapture the up trend. We are in “buy the dip” mode as long as this up trend holds.

OBOSS closed the week at .33 which means the market is healthy (buying and selling pressures almost equal). Hopefully you took advantage of the over sold condition and picked up some good quality stocks during that period as we are up almost 5% from the consolidation low across the board.

.33 does not give us an edge on which way the market will trade so we need to look at the moving averages of the major indexes. I prefer to use the S&P500 as a bench mark. SPY is a good ETF to view the price action of the S&P 500. The good news is as follows…

#1 SPY is trading above it’s 50 MA

#2 SPY’s 50 MA is moving up

#3 SPY’s 5 day MA is moving up and the price of SPY just broke out above the 5 day MA

These three items indicated that the up trend has been salvaged from the last consolidation and the overall price action should head higher. In other words, the odds favor a move higher from here. Our next level of resistance on SPY is 133.70 and then again around the previous 52 week high of 134.70 If we break above that level on SPY we should look for the 133.70-134.70 to provide support as the 125 level did during this consolidation.

While we expect higher prices from here there will be dips along the way. These are considered buying opportunities as long as the market is in a confirmed up trend. The biggest risk right now is the overall negative headline or new article risk. The news has been anything but positive and the market has been able to push higher. Let’s hope it continues on the path of least resistance which is currently higher. Have a great weekend.

OBOSS closed today at -.46 which is a neutral signal. The market is clearly working off the over sold condition with this recent rally. At this point OBOSS isn’t giving us an indication on what will happen next. We will have to take our clues from the market price action. Our best guess is the previous strong up trend will resume once the consolidation is complete. That guess is based on… #1 OBOSS became extremely over sold in a primary up trend last week which indicated a strong bounce was eminent. #2 The market bounced off a strong support area. #3 The market fell back and tested that support area and continued higher even while the new media was pumping out negative articles. Once we cross the zero indicator on OBOSS we will revisit the moving averages and take into account what direction the 50 day MA is pointing as well as how far above or below the 50 MA the market is trading. The odds favor a move higher, but there could be some bumps along the way so use caution, protect the profits you made the last few days, and keep some buying power ready for the dips.

Tomorrow I would expect a little consolidation from this level which would give us a higher low on the S&P 500′s 30 minute chart.

OBOSS closed the week at -1.42 which is considered an over sold condition. The market is more or less neutral trending on the daily time frame while it is trending lower on the shorter time frames. This along with higher volatility gives us good reason to be cautious. The good news is we bounced from a good level of support this week and it seems like the market is trying to build momentum for a push higher. While we are oversold it is still ok to buy good quality value stocks like you find in Geobargins and Geospecials with the theory that the market will continue higher to reset this over sold condition. The market should return to a balance (OBOSS near zero) at which time we will review the trends to see if raising more cash is the best option. Right now it looks like we are leaning towards a bearish trend, but that could change next week.

OBOSS recovered a bit from the extreme over sold condition we saw last night. We are still over sold and the market is more or less neutral trending. This doesn’t give us much of an edge, but I expect the over sold condition to get cleared before the next major move up or down. With the market being over sold and the trend being neutral the best thing to do is make sure you have the best quality stocks in your portfolio you can buy. If you see something of value that is deeply discounted, it makes sense to add to that position while we ride the bounce.

BOSS closed at -2.3 which is a signal the market is severely over sold. OBOSS is signaling that a bounce is very likely tomorrow or in the very near future. We have not gone from an over bought condition to an extremely over sold condition this quick since the financial crisis in 2008. This signal comes at a time when the up trend is questionable. The 10 and 20 day moving averages on the S&P 500 are moving down and now the 50 day looks like it might start declining soon. The price of the S&P500 is below it’s 50 day moving average as well.

This is a good time to review your portfolio for any stocks that are not high quality and re balance by selling the risky positions and using that buying power to scale into higher quality stocks. In other words… if you’re holding lotto plays, sell them now and use the cash to buy something of value asap. After we get the bounce higher it will be a good time to review the market overall. If the S&P 500′s 50 day moving average is moving down after the bounce, you might consider increasing the amount of cash in the portfolio. If you are on margin, it is time to close it out.

OBOSS closed today at -.50 which is a neutral signal and hopefully indicates that the longer term trends will soon resume. We need a -1.5 or -2.0 to start getting into over sold territory so continue to shop for high quality value stocks as featured in GeoSpecials and Geobargins. Scale in on purchases saving buying power for down days like today. Caution is advised as we are experiencing higher levels of volatility. I would reduce risk by making sure your account is not extended on margin in case the market does continue lower and become over sold.

Not much change from the last three days. OBOSS is holding at healthy levels and we are seeing healthy levels of buying and selling in the market. Caution is still advised, but we should be buying good value stocks as listed in GeoBargins and GeoSpecials while protecting profits on existing positions by following sell rules.

OBOSS closed at .8 which indicates to me that while the market was going down there was a bid under the market. In other words…buyers were buying stocks as the market moved lower. Caution is still advised as we’re seeing more intra-day volatility. Keep true to your sell rules and only buy good value stocks like you see in GeoBargins.

As George Soros says…
“Volatility peaks at turning points and diminishes with the trend”

OBOSS soared back to 1.4. While this is extremely bullish it does make me nervous because we’re starting to see large moves in the overall market (up and down) and not all stocks are participating. OBOSS is still in a healthy zone to buy stocks so continue to looks for value stocks to add to your portfolio. Review your sell rules and keep diligent about protecting profits. While OBOSS is at healthy levels we’ve seen some drastic changes from a .4 to a 1.4 in one trading day. These kinds of moves indicate higher volatility and that usually happens around turning points in the market. It might just indicate that the market is ready to head to new highs without looking back, but don’t become complacent as the market is about to get interesting.

OBOSS is starting to get back to healthier levels which might indicate that the consolidation is slowing down. There is still plenty of room for the market to consolidate further, but considering the strength of the recent rally I feel a major correction is less likely then a small consolidation. At some point one of these consolidations will turn into a major market correction. The trend is still up and we should be buying good quality stocks on the pull backs until the trend has changed. Let’s keep any eye on the S&P 500 for clues when the rally will resume.

OBOSS is hovering at levels that indicate healthy buying and selling in our markets. What we are experiencing so far is a time consolidation vs a price consolidation.This is what we were looking for in the “best case scenario” when we saw the market was over extended or over bought last month. Time consolidations can continue for a while without upsetting the current trend. The market continues to be in an up trend so we are purchasing Geo bargains and looking for new value stocks to add to our shopping lists. I like to gradually enter positions (scale in) keeping some buying power for future dips.

The market consolidated a little today and OBOSS is at healthy levels for a bull market. What this tells us is we are not over bought or over sold which would indicate that the longer term trends will resume. We are in an uptrend so this is a good time to pull out your shopping list and buy GeoBargins.

OBOSS closed today at 1.2 which is a healthy level to buy under valued stocks that are on your shopping list. This doesn’t guarantee the market will go up or down, but it does tell us that buying and selling are at healthy levels and the long term trend should continue.

OBOSS closed out the week at 1 which is a very healthy level for a bull market. Hopefully you were able to take advantage of the drop in the market this week using OBOSS. If you purchased some Geo Bargins when OBOSS reset, I know you’re happy with the results
Have a great weekend!

OBOSS is starting to stabilize right about the neutral line. This is a good indication the market is starting to settle after a few days of consolidation. We expect that the up trend will resume relatively soon. Hopefully you were able to buy some Geo bargains at a discount this week.

Great news! The over bought condition created by this strong bull market has been reset in one day of price consolidation. We are now at a much healthier level for the market. This is a great time to be buying those stocks on your shopping list.
The market could still consolidate further causing an over sold condition, but that is not normal during very healthy bull markets. This is a very strong bull market and I expect that as OBOSS gravitates towards the zero line we should expect a nice bounce from these levels. We are still in an up trend and this is not a signal to sell short.

The market continues to rally in a very strong up trend. OBOSS is still holding in extreme levels, but we have not seen a day that has pushed it to the max level of 2.5 Whenever we hover at these elevated levels it is a good idea to keep a close eye on your portfolio and protect profits. This is one of the longest stretches for OBOSS to be in extended territory without pushing to the +2.5 levels. A +2.5 is an indication that the trend is about to reverse course so as long as we hover here this could go on for a long time. At +2 we still expect to see consolidation days where you will have buying opportunities like earlier this week. The buying opportunities show up and are gone before lunch most afternoons. I believe the early morning consolidation is what keeps OBOSS in check and doesn’t allow it to push higher then it is now. Keep an eye open for consolidation (buying opportunities) and protect your current profits.

It was a great week to be invested in stocks. We had a few good days of healthy consolidation and a few strong rally days. Today pushed OBOSS > 2 again so we will expect next week should bring us some more consolidation to work off the over bought condition, but we are in a healthy bull markets so hopefully it will continue to be a time based consolidation vs. a price pull back.
When OBOSS is greater then 2 we should be protecting profits by watching our portfolios closely for any stocks that are showing weakness. Let your winners run and hopefully we’ll have a good buying opportunity next week to add more winners to our portfolios.

OBOSS is still hovering around +2 Today we experienced some healthy consolidation in the market. A few days like today is all it will take to reset OBOSS back to healthier levels. Today is a good example of what a time based consolidation looks like in a healthy bull (UP) market.

Not much has changed and the market is still very over bought. The trend is higher so let your winners run and cut your losers. We are looking for consolidation through time or price before adding additional shares.

OBOSS closed at 2.2 today which is considered an extreme level for this indicator. Enjoy the profits and keep a close eye on your portfolio. Our job at this time is to protect profits and look for buying opportunities. With OBOSS being above 2, I would hold off on new purchases until after the market consolidates. The market will consolidate through time or through price action. A time consolidation could have the market hover near these levels until the over bought condition is worked off. A price consolidation would reset the over bought condition by declining prices.

OBOSS is in red alert territory since it is greater then 2.0 The last reading was 2.2 which is considered an extreme level.

This means we should be protecting profits and taking a close look at our portfolio for any stocks that start to show weakness.This is a good time to let those profits accumulate!! I wouldn’t suggest adding new positions today as you will probably have a better price entry point after this extreme level is “worked off” through consolidation in the near future. I don’t usually worry about intra-day readings as the end of the day is more important, but I wanted to let you know about it because this is the first time we’ve broken 2 since Nov. 2010

OBOSS is drifting in the upper area of the indicators range. This indicates that we should be actively watching our portfolios and protecting profits. If you’re waiting to buy new shares in a stock, you might get a better price by waiting until OBOSS resets in the middle of the range.

OBOSS has dropped from an extreme 1.9 earlier this month to .81 Friday. The trend is still up (looking at S&P500). Dips should be bought until price dips below the 50 day moving average and the moving average is not moving up.

Levels between -1.5 and +1.5 are considered healthy levels for this indicator. That means the longer term trend in the market will most likely resume within a short amount of time. This is a good time to review your portfolio and see which stocks are holding up and which stocks are failing. If you look at each position as an individual player on a team, it’s time to review who needs to sit on the bench and who you want on the field. It is a good opportunity to add to positions that are strong by re balancing your portfolio.

Example: The last time OBOSS was at this level (November 29th) – SPY was trading at 118. If you had been a buyer at this time, you would be up at least 10% had you randomly purchased all of the stocks in the S&P 500. Most individually groomed portfolios are up much more then that during the same time period.

OBOSS is hovering at 1.6 This level warrants keeping an eye the markets for any extreme move higher. It doesn’t take much to move OBOSS from 1.5 to 2.0 so we will be watching it closely the next few days. The market is in a healthy up trend. The trend should continue until we get extremely over bought signals.

OBOSS worked off the extreme over bought signal from Monday. We are now at 1.3 which is a healthier level for this indicator. Ideally we want to see levels under 1 during bull markets for good entry points.

What this means is the market is no longer extremely over bought. This is a good time to review current holdings and see how they hold up during this corrective phase in the market. If you see a position that has not performed well, it may be time to reallocate the funds to a position that is holding up. It may also be a good time to add shares to existing holdings that are doing well. The S&P 500′s 50 MA is still climbing higher so we are still in a bull market. Normally as long as the price is above the 50 MA and the 50MA is moving higher we like to buy good stocks when they go on sale.
Let’s go make some money!!